Palestinians walking past a sign painted on a wall in the West Bank, June 5, 2015. (AFP photo)

Lawmakers in the US state of California have passed a law that aims to punish companies partaking in a worldwide boycott campaign against Israel.

The legislation, which was approved on Tuesday, seeks to prevent state government agencies from awarding contracts of $100,000 or more to companies that support the Boycott, Divestment and Sanctions (BDS) movement.

The California State Assembly voted 60-0 to approve the law, after it was passed in the state Senate in a 34-1 vote on August 24.

The original draft of the law included a ban on companies boycotting Israel, but was faced with backlash from some lawmakers who said it violates the constitutional right to boycott.

To satisfy those critics, the legislators approved a watered down version of the bill that required companies to guarantee that their sanctions against foreign entities do not violate California civil rights laws.

“The bottom line is that the state should not subsidize discrimination in any form,” said Democratic Assemblyman Richard Bloom, the author of the bill.

California Governor Jerry Brown has 12 days to approve or veto the measure.

Pro-BDS protesters (file photo)

The law was hailed by the American Jewish Committee (AJC), with the chairman of its Los Angeles branch saying he was “very confident” that Brown will sign the bill into law.

“This bill sends the clear and unmistakable message that the state of California wants no part of the goals and tactics of this pernicious movement,” said Janna Weinstein Smith, director of the AJC’s Los Angeles Region.

Initiated in 2005 by over 170 Palestinian organizations, the BDS has gone on to include thousands of organizations, companies and individuals worldwide who promote the Palestinian cause.

The campaign seeks to end the Israeli regime’s occupation of “all Arab lands” and has been targeted by similar legislation in several other states.

Over half a million Israelis live in more than 230 illegal settlements built since the 1967 Israeli occupation of the Palestinian territories of the West Bank including East Jerusalem al-Quds.

Additionally, there are more than 6,500 Palestinians, including children, who are being held at Israeli jails.